Intel Stock Price Forecast - INTC Shares Eyes $65 as Nvidia Alliance, Tesla Talks, and U.S. Billions Ignite 2026 Bull Run

Intel’s Comeback Fueled by $5B Nvidia Partnership and Federal Support

Intel (NASDAQ:INTC) has doubled in value in 2025, trading around $44 per share, marking one of the strongest comebacks in the semiconductor industry. The surge follows a powerful mix of new investments, strategic alliances, and political backing that have redefined Intel’s role in the global chip race. A pivotal moment came when Nvidia invested $5 billion to co-develop new generations of data center and PC processors built on Intel’s x86 architecture. This deal positions Intel directly within the $150 billion AI server market, expected to see 77% of its chips run on x86 systems in 2025.

Intel’s partnership with Nvidia extends beyond servers, integrating Nvidia’s graphics engines into future Intel system-on-chips (SoCs) for PCs. That could reignite its dominance in client computing after years of decline. The U.S. government’s $8.9 billion funding and SoftBank’s $2 billion capital injection have further strengthened Intel’s manufacturing expansion plan, enabling it to scale advanced 5nm and sub-5nm fabs on American soil.

Tesla Collaboration Could Redefine Intel’s AI Future

Investor excitement rose sharply after Elon Musk said Tesla “might do something with Intel,” sparking speculation about a potential chip production partnership. Following the statement, INTC jumped 2.6%, while Tesla rose 1.5% in early trading. The two companies could partner to produce Tesla’s AI5 chips used in robotaxis and robotics—an opportunity that would turn Intel’s struggling foundry into a key AI manufacturing hub.

Intel’s foundry segment, which generated $4.2 billion in revenue but lost $2.3 billion last quarter, desperately needs scale. A Tesla partnership would provide that scale and validate Intel’s technology against TSMC and Samsung, its biggest rivals. The U.S. government’s 10% stake in Intel also ensures continued support for strategic deals that align with national semiconductor policy.

Restructuring, Efficiency, and EPS Recovery Show Fundamental Progress

Under CEO Lip-Bu Tan, Intel has become leaner and more focused. Tan sold a $4.46 billion stake in Altera, using proceeds to cut debt and stabilize cash flow. The company’s cash burn is down significantly, and cost-cutting measures are working. In Q2 2025, Intel reported $12.6 billion in revenue, roughly flat year-over-year, and narrowed its loss to $0.10 per share from $0.13 the previous year.

Analysts now expect $0.12 EPS for FY2025, rising sharply to $0.60 by 2027, as AI and foundry revenues accelerate. Intel’s market cap of $200 billion looks modest next to Nvidia’s $5 trillion, but it trades at just 15x forward earnings (excluding foundry losses) compared with Nvidia’s 45x, leaving ample upside potential.

Federal Funding and U.S. Foundry Expansion Create Long-Term Moat

Intel’s reshoring plan is one of the most aggressive in U.S. industrial history. With government backing, Intel is ramping up fabrication capacity to ensure semiconductor sovereignty and reduce reliance on Taiwan. The company’s foundry division—though still unprofitable—is a long-term play on national security and AI infrastructure, two themes attracting trillions in global investment.

The foundry’s success depends on customer diversification. With Nvidia already onboard and Tesla potentially next, Intel could achieve breakeven in late 2026. If it secures another major hyperscale client, the foundry could generate $10–12 billion annually by 2027, positioning Intel as the only Western company competing across both design and manufacturing.